Otokar Surges Most in Two Months on Defense Deal: Istanbul Mover
Otokar Otomotiv ve Savunma Sanayi AS, a Turkish producer of civilian and military vehicles, jumped the most in more than two months after it won a defense contract, boosting margin expectations.
The shares climbed 8.4 percent, the biggest advance since June 26, to 51.4 liras at the 12:30 p.m. mid-day break in Istanbul. More than 440,000 shares changed hands, about 1.3 times the stock’s three-month daily average, according to data compiled by Bloomberg. The Borsa Istanbul National 100 Index added 1.3 percent, rising for the first time in three days.
The company got a 227.9 million liras ($112 million) contract to supply armored tactical vehicles to the Turkish military, it said in a statement to Borsa Istanbul today. The size of the deal is equivalent to about a quarter of last year’s sales, data compiled by Bloomberg show. Deliveries will start this year and end in 2015, according to the statement.
“Otokar is among a handful of companies that play a prominent role in such military contracts,” Onur Marsan, an analyst at Garanti Securities, said by phone from Istanbul. “The contract will have a positive effect on sales and margins for the next three years.”
The company’s net income slipped to 28.8 million liras in the second quarter, from 30.6 million liras a year earlier, even as revenue surged 42 percent to 375 million liras, according to data compiled by Bloomberg.
The shares have slumped 20 percent this month, compared with a 9.6 percent drop in Turkey’s benchmark index. Three analysts recommended buying Otokar’s shares, while three others say sell, data compiled by Bloomberg show.
To contact the reporter on this story: Taylan Bilgic in Istanbul at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Maedler at email@example.com